We have all experienced what it feels like to save early on, from protecting our tooth-fairy loonies to receiving our first wallet. Later, financial advice came in the form of family, friends, co-workers, professionals, and even mentors who provided us with their tips and tricks to keep the funds in our pockets. We asked six members of our Invisor team for the best financial advice they have ever received. Here’s what they had to say.
The best financial advice was from an article I’d read several years ago, perhaps when in high school. It was something very basic and much more than just financial advice – knowing to recognize the difference between a ‘need’ and a ‘want’. The reason it stuck with me and now comes to mind is because it ties in directly to savings. The article suggested that when we are able to control our desires and stay more in the ‘need’ camp, we are more likely to keep our lives simple, and by extension, save more for our future needs. This advice has helped me save regularly (albeit small amounts), which I believe is the definitive way to stay on track towards realizing long term goals.
I remember asking my dad to borrow money to buy a small toy race car. He said ‘If you really want it, why don’t you save up for it and buy it when you have the money? You may feel differently about spending the money when you think back to how hard you worked to save it. But if you still want the race car, you can buy it then and enjoy it knowing you earned it…and you won’t have to worry about paying me back!’ He taught me that not all debt is bad, but we shouldn’t buy ‘toys’ we can’t afford until we have worked hard, saved, and earned them!
My grandmother taught me that it’s important to keep it simple, when it comes to finance or anything else in life. She doesn’t have a lot of frills, and when she does buy things, she makes sure they are good quality. Even when she cooks she keeps the ingredient list simple, and I’ve never had a better apple pie. The fewer things you have, the easier it is to manage them. Just like with your finances, minimize the number of products (like credit cards) you have so you don’t lose track, and when it comes to investing, pick good quality investments.
When it comes to financial advice, my parents are definitely making it up as they go along - which I guess everybody is. But the best advice I’ve heard comes from a friend of the family, who is actually a financial advisor. We get together each year to go over taxes, but it wasn’t until my recent purchase of a home that we had a real conversation about debt and savings. I was worried about my mortgage term and how quickly I should try to pay it off. Should I be making extra payments on the principal as often as I can? Basically it came down to this: If I had an extra bit of money, it would be better to put it into savings instead of paying off the principle because the savings account has a higher interest rate than the interest rate of the mortgage. For some reason, this clicked and stuck with me. It makes simple sense, and there’s an added benefit of that nice feeling you get when you see your own nest egg start to grow, instead of the feeling of helplessness as you see only a few small numbers change when you try to throw money into the Endless Void that is a new mortgage.
Growing up pre-internet, I spent a lot of family-time playing board games. I remember finally being old enough to play Pay-Day and Monopoly and actually thought I was using real money! Fast-forward to a family outing where we were allowed to buy something, and I pulled out a wad of board-game cash [cue laughter from older siblings]. My dad, who was a banker, took that moment to explain and show me real money. It also resulted in a trip to the bank to open my first savings account, which I still have! From that moment on, I was encouraged to always save-for-a-rainy-day and the possibility of buying items that I wanted versus needed!
The best financial advice I’ve received boils down to four points. First: don’t be greedy and fall for rich quick schemes. Second: patience is a virtue and it pays off in a long run. Third: choose judiciously and stick to it, don’t panic. And finally: take a step back and look from a longer perspective.
At Invisor, we are here to guide you through the investing process and help you turn the valuable financial lessons you learn along the way into long-term returns for future savings.
Invisor offers Canadian investors personalized investment management solutions at a fraction of the cost of traditional advisor models, without requiring any minimum investment amounts. Get started now to tell us a little about yourself and your goals, and we’ll find an investment solution just right for you.
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